Member Info for HarrysDog

At times like these with no news flow I just re-watch the previous JV interview to get the reassurance I need that we’re in good hands. Just have to be patient with the GS sale.

This is the news that I’ve been waiting for, verification that RBW will be able to produce separated oxides at high purity, and that they are now ready to finalise the flow sheet. I’ve topped up on this basis . Surprised at the SP drop though today.

The troll will be getting desperate as RBW moves towards DFS. Expect more drivel.

Thank you Smudge. I feel it’s now more a case of when than if for Cora. And perhaps soon judging by the movement on other licences.

Time for a little top up I think.

Do we know if any licences/ permits have been refused as part of the recent lifting of the moratorium?

The quickest way to production may be neither onshore or offshore Morocco. Looking again at the Proactive interview with Adonis, at 3:30, he said, "we're

moving towards a world where we'll have assets that we want to bring into our business over the next 12 months that are near production or in production".

Did he mis-speak? Because Loukos and Anchois are already in the business. So are we looking to farm in to other producing or near-producing fields elsewhere, and hitherto not mentioned? Clearly Namibia is not near production, so where else?

Obviously, the issue is how does Char afford that, as Adonis alludes to himself. I don't understand how 'funding at the subsidiary level' would work in this case, but I wonder if we would exchange a portion of Anchois/Loukos or even our share of Namibia for a share of a producing field elesewhere?

Am I barking up the wrong tree? Do you have an insight Oiltdr?

https://youtu.be/6qGismGZ98s

Thanks for the link to the Toubani article Tony. Indeed, B2Gold and Allied have each reached their own separate agreement with the Mali government. Rather than this pointing to a lifting of the blanket suspension of mining permits, this indicates that Cora has some work to do to reach its own agreement with the government, and an update on this from Bert Munro would be interesting.

Links to agreements below.

B2Gold:

https://www.b2gold.com/news/b2gold-reaches-agreement-on-terms-with-mali-government-relating-to-the-framework-for-the-fekola-complex-approvals-for-fekola-regional-and-fekola-underground-to-be-expedited

Allied:

https://alliedgold.com/investor-relations/investor-news/news-details/2024/ALLIED-GOLD-ANNOUNCES-SETTLEMENT-OF-TERMS-OF-A-DEFINITIVE-PROTOCOL-AGREEMENT-WITH-THE-GOVERNMENT-OF-MALI-WHICH-WHEN-SIGNED-WILL-DEAL-WITH-THE-ISSUE-OF-A-TEN-YEAR-EXPLOITATION-PERMIT-FOR-SADIOLA-ADVANCEMENT-OF-THE-KORALI-SUD-DIBA-DEPOSIT-SETTLEMENT-OF/default.aspx

Lol

Also for Namibia: ‘Drill ready, awaiting partnering’. The story of the 2010’s.

I also think this review is a wise move. I would support a split of the power and gas businesses. Neither benefits from the other (it's whatever the opposite of synergy is). IMO the power business could then attract funding from the many sources that would not otherwise be able to invest in fossil fuel companies, and the gas business would look after itself. For the same reasons, I wonder if a similar split off of the green energy business would also have merit.

A sale, rather than split, would enable Chariot's limited headcount to focus on the gas (& green) business, as I'm concerned that they are spread a bit thin at the moment - especially AP, who also has other business interests to look after (Petra, Rainbow, etc). Though I would be surprised if AP would want to sell off the power business while its still in its infancy. Interesting times.

Henry, I think a direct comparison with Sirius is not entirely appropriate. There were perceived issues with Sirius's governance long before they put all their eggs in one basket at Boulby. II's doing detailed due diligence into SXX would have been aware of this. I sold out after they started doling out 100,000's options in exchange for land in Australia for prospective halite deposits, land that otherwise had little value, to companies with indiscernible (to me) operations and ownership structures. (This after a poster on interactive (not me) had raised these concerns and was duly hounded off for being a 'deramper'.)

That said, I'm sorry for all those that lost money in the end, and I agree with your sentiment - for Chariot - that finance is key.

HD

Regarding the recent drop in SP, Anchois and the rest of Lixus/Rissana obviously represent the bulk of Chariot’s value and there’s nothing whatsoever to suggest the Anchois value (NPV) has changed in the past week (recent changes in oil price being irrelevant for future revenue forecasts). The recent drop can only be down to PI sentiment – either directed against Chariot, or people worried about contagion from the Credit Suisse and SVB problems.

I wouldn’t be put off by the size of the sells either. 714k shares could have been accumulated at less than 2p each a couple of years ago, so hardly IIs selling today and not necessarily even high-net-worth individuals. You’d have to see 10’s of millions being dumped if there was an existential crisis behind the scenes.

I can understand some negative sentiment towards Chariot whilst we await substantive news on partnering and debt funding. In the January 2022 webcast, over 12 months ago, JMW reported that both were ‘well progressed’ – and similar words have been repeated since. This delay must be weighing on the share price. A bit more transparency from Chariot would be appreciated.

I do have my own concerns about slippage in target dates for FEED and FID. At the webcast in January 2022, AP said that he hoped FID would be reached by the end of the year (2022) with a two-year ‘build-out’ and start-up in late 2024/ early 2025. FID is now targeted for end of H1 2023, surely implying a start-up in mid-2025. We do not know why FEED overran into this year.

For me, though, I remain as convinced as ever that Anchois will be developed and it will make us all a lot of money, even if there are more delays, and even if Chariot has to go it alone, and I won’t be selling.

While we wait for the next substantive news on GSA, debt funding, partnering and FID, I think it would be reassuring if Chariot could retain the alliance contractor’s key engineering personnel in this (3 month?) period between FEED completion and FID. They could usefully carry out some ‘pre-sanction’ engineering to prevent loss of momentum in the design team and to protect the schedule. This could include tendering critical long-lead equipment. This had been suggested by Duncan in the webcast, so hopefully they’re doing this already.

Also, it wouldn’t hurt to share the new schedule between FID and first gas that would have been prepared as a FEED deliverable (news Jun 22). Until now we have a rough estimate of two years. This will better inform the start-up date based on likely FID and will give us a date to look forward to.

GLA

My understanding has been that a farm-out of part of Anchois would be a ‘nice to have’, in that it would be beneficial in terms of funding, recovery of back costs, third-party validation of the development, etc.

If, according to the research report below, Chariot is looking for 70% debt funding and relying on a partnering stake of 25% to reduce the equity contribution, then a farm-out becomes a necessity rather than a nice-to-have. This could make it that bit harder (read longer) to negotiate farm-out terms if you’re needy.

Has there been any indication (at the AGM or otherwise) that a higher percentage of debt funding is being pursued – even up to 100%, such that Chariot can go it alone?

mouchers...
"They invented something else to not sell any of, until they invent the next thing to not sell any of."
LOL. But let's hope you're wrong!

Dumbpunter,
What is the source of the 'mid 2023' estimate for production please? I have been looking for this recently but was unable to find it in any of the official reports/news.
Thanks, HD

Nomlungu, Florence and Guvvi,
Thank you for your replies, and for putting me right regarding construction financing. Much appreciated.

I have been looking into making an investment here. I don't normally like posting but this one is a bit unusual so I'd like to test my thoughts. Based on some initial research:
Post tax NPV of Lagoa Salgada is $246.7MM (100% share) from Ascendant PEA or $42 MM to MAFL (ultimate 17% share).
Post tax free cash flow is $82 MM per annum for 5 years (100% share) from Ascendant RNS 13 Sept 2021 or $13.94 MM pa to MAFL (ultimate 17% share).
Yet MAFL MCAP is only $5.8 MM (today).
So future free cash flow is worth over twice current MCAP.. Bodes well for future dividends...

I assume that MAFL has to stump up 17% of the initial capital cost (17% x $132.3 MM) as the Ascendant earn-in agreement obliges Ascendant to pay development costs only up to completion of the feasibility study as part of its future 80% stake in Redcorp. Has there been any indication yet on how this will be raised by MAFL?

Biggest risk to LS, I suppose, is loss of government support, and the project not going ahead or being delayed, or parties being unable to raise finance - but to me this seems unlikely in the current climate. Biggest opportunities are resource upgrades. Commodity prices aside, would appreciate any feedback if I've missed anything significant.

I invest here for the potential returns from Anchois. If it wasn't for Anchois, I wouldn't be here - AEMP and project Nour doesn't really float it for me. But I'm really missing something with this announcement.
Firstly, if Chariot is entering into a pre-feasibility study, followed by a full feasibility study, who is covering the costs if this eventually comes to nought? I would like to see this clarified.
Secondly, whilst Mauritania might be found to have potential to generate large scale power generation (up to 10GW!) from wind and solar resources, what about the large quantities of water that are also required to produce hydrogen by electrolysis at this scale. Brief Google search shows that domestic demand in Mauritania currently exceeds the existing supply of fresh water from aquifers. So, that leaves seawater. Electrolysis of seawater comes with its technical challenges as far as I can see due to contamination of electrodes by chlorides, unless desalinated first, and seawater electrolysis technology is rather novel compared with fresh water. The implication is that green hydrogen generated by seawater electrolysis will be more expensive (CAPEX and OPEX wise) and less competitive than green hydrogen generated from fresh water electrolysis. I'm sure someone in Chariot is thinking about this, but I find it odd that water hasn't been mentioned so far.
In the interview, Adonis gave this a name that sounded like 'PowertoX' and mentioned that this would be a potential export for Mauritania for industrial users. Where would this be to - Europe? Would this depend on a new hydrogen pipeline export route, or commingling of hydrogen with existing natural gas pipelines - something that UK hasn't even been able to achieve yet?
This has got 'long term' written all over it as far as I can see. I'd like to see Chariot's fag packet calculations on what the economics and timeframe are for this.
Any views and answers would be appreciated.

I’ve been a visitor to this board (and previously the ii forum) for several years and I’m part of what I’d like to think is a silent majority that doesn’t post much (or maybe that's just me) but I would like to dampen some of the concerns regarding the lack of orders so far.

As someone involved on the technical side of specifying and requisitioning power generation equipment on behalf of an end customer, I can only give testament to the amount of time it takes to go through the bidding and evaluation process up to eventual order placement. In my industry (oil and gas) a very good outcome would be to have bids generated, received and evaluated, and an order placed within 3 months of an enquiry, and that would be for standard, proven kit (small turbine or gas/diesel engine). 6 months would not be unusual, nor would 9 months, especially if an end user doesn’t really know what it needs, or keeps changing its spec, requiring a supplier to re-tender. I am aware that in other industries the process can take even longer, especially when selling to the public sector.

In this case, with AFC’s fuel cell system, the customer is buying in to novel technology, and is starting from a point where it doesn’t have any expert understanding of what’s in the box nor what it has to provide outside the box to make it all work. The customer ought to do its own due diligence into the technology. The extent to which the customer will do this depends on the criticality of the intended application and the resources available to do the work. This would involve assessment of technical readiness and qualification status of the overall equipment and key components. The customer might ask for independent studies, such as FMECA, to understand consequences of component failure. At the end of all this, once the technical/procurement team is ready to recommend a supplier’s equipment for purchase, then there are budget holders and their operations staff to be convinced – all of which takes TIME.

Adam Bond has told us in June (?) that he has several qualified enquiries on his desk. That is good enough for me, as an investor, for now. Now we have to wait and be patient for AFC and the potential customers to do their work.

GLA

BillyRayVal,
Yes, the date has changed as you say, however H1 2023 seemed to me to be overly optimistic. Even if Anchois is to be developed with standard technologies (as reported) the onshore processing plant is still likely to require long-lead equipment (gas compressors, power generators - possibly gas turbine driven) with delivery times exceeding 12 months. Typically, this isn't going to be ordered until FID, which follows FEED, and then there's the installation and commissioning time to consider. 2H 2024 seems an appropriate forecast. By the way, the Genesis pre-FEED study should have looked at a processing scheme for the onshore, so this would inform the planning work.

Yes Whimax, but I dont understand who would be buying only £31.50 of shares! A signal, or manipulation of the AP, I don’t know.